Legal Definitions - fringe benefit

A fringe benefit refers to an advantage or perk that an employer provides to an employee, in addition to their regular salary or wages. These benefits are typically non-cash or offer a financial saving, and they are designed to enhance an employee's overall compensation package and well-being. While some fringe benefits may be subject to taxation, others are specifically excluded from taxable income under certain legal conditions.

Here are some examples to illustrate this concept:

• Professional Development Program

  Imagine a technology company that pays for its software engineers to attend an advanced coding bootcamp or obtain a specialized industry certification. This is a fringe benefit because the company is providing a valuable service (training) that enhances the employee's skills and career prospects, without directly adding to their paycheck. It's an extra perk that benefits both the employee and the company by fostering professional growth.

• On-site Childcare Services

  Consider a large corporation that offers a subsidized daycare facility located within its office complex for employees' children. This illustrates a fringe benefit as the employer is providing a significant service that reduces the financial burden and logistical stress of childcare for its employees. It's a valuable benefit offered in addition to their regular wages, making the job more attractive and supportive for parents.

• Home Office Equipment Allowance

  Suppose an employer provides new remote hires with a one-time allowance to purchase ergonomic office chairs, monitors, and other necessary equipment for their home workspace. This is a fringe benefit because the employer is directly funding the purchase of items that improve the employee's working environment and productivity, rather than increasing their salary. It's an additional advantage that supports the employee's ability to perform their job effectively from home.